The ABC Analysis

The ABC Analysis

The ABC analysis examines the purchasing volume at the relationship level. Using the ABC analysis, you can estimate whether there is an excessively large (or, in some cases, too small) number of relationships responsible for a percentage of the purchasing volume. This may prompt a reevaluation of suppliers. The relationships are divided into groups to determine which group contributes the most to the purchasing volume.

Selection

By choosing an invoice date and an administration on the left side, you can generate an overview. By filling in multiple selection criteria, you can create various summaries.

Pareto Chart

In the Pareto chart, you can see the costs in relation to the relationships. According to the Pareto principle, 80% of the purchasing volume should be allocated to 20% of the relationships. The relationships that account for 80% of the purchasing volume are classified as A relationships. The B and C relationships share the remaining 20% of the purchasing volume.



The red line on the chart represents the Pareto principle's standard. The blue line shows your organization's actual status compared to the standard.

Using the ABC analysis

In the ABC analysis, you'll find an overview of the number of relationships responsible for each percentage of the purchasing volume. A relationships are the most crucial relationships for the organization. To meet the standard, the organization should aim for about 20% of the relationships to collectively constitute approximately 80% of the purchasing volume. B relationships account for 15% of the purchasing volume. To meet the standard, this should represent about 30% of the relationship base. C relationships contribute almost nothing to the purchasing volume, around 5%. To meet the standard, this should apply to 50% of the relationships.

Below the Pareto chart, you'll find a table with more information about the relationships, such as the total amount and the percentage of the relationship's purchasing volume. In the 'Category' column, you can see whether the relationship is classified as an A, B, or C relationship.

Exporting ABC Analysis

On the right side of the Pareto chart, you'll find a download icon. Clicking on this allows you to download an image of the chart in JPG or PDF format. You can also create an XLS or CSV export to further break down the underlying data.



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